Growing Danger for Failure to Address Conditional Payments in Private Insurance Plans
By: Jeff Stinson
Earlier this year, I was featured in an article published by Claims Journal regarding third-party recovery efforts with regard to conditional payments made by private health insurance plans. The article can be accessed here.
Since that article was published, another Federal Appeals Court has affirmed the ability of third parties to pursue these private causes of action. In a decision from October of this year, the Second Circuit Court of Appeals, which comprises New York, Connecticut and Vermont, agreed with prior decisions from the Third and Eleventh Circuits in affirming the right of third parties to bring double damage claims.
The Medicare Secondary Payer (MSP) Act provides a private cause of action when a primary payer, such as a workers’ compensation employer/insurer, fails to reimburse Medicare for conditional payments, and if successful, the recovery is double the amount due. Traditionally, these recovery efforts were limited to traditional Medicare (Parts A and B). However, these three Circuits have now affirmed those recovery rights can extend to private health insurance plans which mirror Medicare benefits, such as Medicare Advantage or prescription drug plans. Private entities, which are funded with significant equity, and thus have deep pockets to fund these claims such as MSP Recovery, have brought these suits in hopes of recovering the double damages.
These third-party suits thus far have typically concentrated on the automobile and general liability industries. However, now that a third Circuit has confirmed the rights of these third parties to sue, there could be a greater likelihood their efforts may soon invade the workers’ compensation industry. As such, employers and insurers in workers’ compensation claims need to be mindful of the potential that benefits were paid under a Medicare Part C or D Plan and address any conditional payments in any settlement.
Attorney Contact Info
Jeff Stinson
jeff.stinson@swiftcurrie.com
404.888.6207